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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
Future Land Development Holdings Limited
新城發展控股有限公司
(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1030)
DISCLOSEABLE TRANSACTION
FORMATION OF JOINT VENTURE
SHAREHOLDERS’ AGREEMENT
The Board is pleased to announce that the Shareholders’ Agreement was entered into between Future Land Investment, a wholly-owned subsidiary of the Company, and the Joint Venture Partners in relation to the establishment and management of the JV Investment Company.
Pursuant to the Shareholders’ Agreement, the registered capital of the JV Investment Company shall be RMB8,600,000,000, of which Future Land Investment shall contribute RMB1,000,000,000, representing approximately 11.63% of the total registered capital of the JV Investment Company. The business scope of the JV Investment Company is equity and debt investment and management, industrial investment, asset management, international mergers and acquisitions, commercial consultancy, financial consultancy, investment consultancy and such other onshore and offshore investment and asset management business as permitted under the PRC laws and regulations.
LISTING RULES IMPLICATION
As the applicable percentage ratios as set out in the Listing Rules in respect of the capital contribution by Future Land Investment to the JV Investment Company are more than 5% but are less than 25%, the establishment of the JV Investment Company and the Shareholders’ Agreement constitute a discloseable transaction for the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
SHAREHOLDERS’ AGREEMENT
The principal terms of the Shareholders’ Agreement are set out below: Effective Date:
June 28, 2016 Parties:
(1) Future Land Investment Co., Ltd.* (新城發展投資有限公司); (2) Jiangsu Shagang Group Co., Ltd.* (江蘇沙鋼集團有限公司); (3) GCL Capital Management Limited *(協鑫資本管理有限公司); (4) Hongdou Group Co., Ltd.* (紅豆集團有限公司);
(5) Jiangsu Yangzijiang Shipyard Co., Ltd.* (江蘇揚子江船廠有限公司);
(6) Jiangyin Chengxing Industrial Group Co., Ltd.* (江陰澄星實業集團有限公司);
(7) Nanjing Fullshare Dazu Technology Company Limited* (南京豐盛大族科技股份有限公司); (8) Jiangsu Zhongchao Holding Co, Ltd.* (江蘇中超控股股份有限公司);
(9) Suzhou Zhenghe Investment Co., Ltd.* (蘇州正和投資有限公司); (10) Far East Holding Group Co., Ltd.* (遠東控股集團有限公司); and
(11) Jiangsu Xinyuan Industrial Investment Co., Ltd.* (江蘇新苑實業投資有限公司)
3 Registered capital and capital contribution
The total amount of registered capital of the JV Investment Company is RMB8,600,000,000, which will be contributed by the parties to the Shareholders’ Agreement in proportion to their respective subscription percentages of the share capital of the JV Investment Company as follows:
Parties
Amount of capital
contribution Shareholding percentage
(RMB) Jiangsu Shagang 1,000,000,000 11.63% GCL Capital 1,000,000,000 11.63% Hongdou Group 1,000,000,000 11.63% Yangzijiang Shipyard 1,000,000,000 11.63% Chengxing Group 1,000,000,000 11.63%
Future Land Investment 1,000,000,000 11.63%
Nanjing Fullshare 1,000,000,000 11.63%
Zhongchao Holding 500,000,000 5.81%
Zhenghe Investment 500,000,000 5.81%
Far East Holding 500,000,000 5.81%
Xinyuan Industrial 100,000,000 1.16%
Total 8,600,000,000 100%
The JV Shareholders agree that there shall be no single largest shareholder for the JV Investment Company. The number of the JV Shareholders with the largest capital contribution shall not be less than three and their respective capital contributions shall be equal.
The capital contribution of each JV Shareholder shall be made in cash by four instalments: First instalment: 20%;
Second instalment: 20%; Third instalment: 30%; and Fourth instalment: 30%.
The first instalment shall be paid within 30 days after the first JV Shareholders’ Meeting. The timing for the payment of the second to fourth instalments shall require approval by the JV Shareholders holding two-thirds equity interests in the JV Investment Company upon recommendation of the JV Board based on the development and investment projects of the JV Investment Company.
Future Land Investment will satisfy its capital contribution to the JV Investment Company by its own internal resources.
Profit Sharing
Increase in capital contribution
The capital contribution for the JV Investment Company may be increased, depending on the business situation of the JV Investment Company and investment environment, which requires the unanimous consent all JV Shareholders.
The time of payment for the second to fourth instalments shall require approval by the JV Shareholders of two-thirds of the shareholding upon recommendation of the JV Board based on the development and investment projects of the JV.
Business scope
The business scope of the JV Investment Company is equity and debt investment and management, industrial investment, asset management, international mergers and acquisitions, commercial consultancy, financial consultancy, investment consultancy and such other onshore and offshore investment and asset management business as permitted under the PRC laws and regulations.
Management of the JV Investment Company
Pursuant to the Shareholders’ Agreement, the highest authority of the JV Investment Company is the JV Shareholders’ Meeting. The JV Board will be comprised of nine directors which will be elected at the JV Shareholders’ Meeting. The rules of procedures for the JV Shareholders’ Meeting and the JV Board are to be further specified in the articles of association of the JV Investment Company.
Investment decision
Investment projects of such amounts (i) above RMB1,000,000,000 or 10% of the JV Investment Company’s latest audited net assets; (ii) below RMB1,000,000,000 and between 5% and 10% of the JV Investment Company’s latest audited net assets; and (iii) below RMB500,000,000 and less than 5% of the JV Investment Company’s latest audited net assets shall respectively be approved (i) at the JV Shareholders’ Meeting, (ii) by the JV Board and (iii) by the management of the JV Investment Company.
Lock-up
The Founding Shareholders shall not (directly or indirectly) dispose of their equity interests in the JV Investment Company during the first three years after the JV Investment Company’s establishment. Other JV Shareholders shall not (directly or indirectly) dispose of their equity interests in the JV Investment Company during the first year after it becomes a JV Shareholder. The aforesaid restriction shall not apply to pledge of JV Shareholder’s equity interests in the JV Investment Company or other related dealings.
Transfer of interests by JV Shareholders
5 Effect of the Shareholders’ Agreement
The Shareholders’ Agreement shall take effect upon the date of all JV Shareholders signing and affixing their seals to the Shareholders’ Agreement.
REASONS FOR AND BENEFITS OF ENTERING INTO THE SHAREHOLDERS’ AGREEMENT
It is the JV Investment Company’s strategy to participate in the important local infrastructure projects and reform of state-owned enterprises and invest in innovative and high-tech industries with policy support. In addition, the JV Investment Company aims to build an integrated industrial platform for financial and capital investment and asset management on a national basis with the resources of the JV Shareholders, which are the leading private enterprises of Jiangsu. The JV Investment Company will actively seek investment projects to advance the economy of Jiangsu, which will in return provide long-term support for the development of the JV Investment Company. The Company believes that the establishment of the JV Investment Company is in line with the Group’s investment strategy and represents a good investment opportunity with huge growth potential and the cooperation with the Joint Venture Partners will further expand the Group’s business network. The JV Investment Company is a strategic development milestone of the Group, which will diverse the business coverage, broaden the revenue stream and enhance the profitability of the Group.
The terms of the Shareholders’ Agreement were negotiated with the Joint Venture Partners on arm’s length basis and on normal commercial terms. The capital contribution amount of RMB1,000,000,000 by Future Land Investment was arrived at after considering the initial capital requirement of the JV Investment Company and Future Land Investment’s shareholding percentage in the JV Investment Company. The Directors consider that the terms of the Shareholders’ Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole.
INFORMATION ON THE GROUP AND FUTURE LAND INVESTMENT
Future Land Investment is a subsidiary of the Company for investment holding purpose. The principal activities of the Group and Future Land Investment are property development, property investment and commercial property management in the PRC.
INFORMATION ON THE OTHER PARTIES
Jiangsu Shagang is a limited company established in the PRC principally engaged in metal related raw material, processing, and sale of the company’s products, construction and investment.
GCL Capital is a limited company established in the PRC principally engaged in investment and business advisory.
Hongdou Group is a limited company established in the PRC principally engaged in investment, clothing related products manufacturing, design, technical advisory and import and export business and yew bonsai, seedling cultivation and sales.
Chengxing Group is a limited company established in the PRC principally engaged in sale of chemical raw materials, import and export business, investment, financial and corporate governance advisory.
Nanjing Fullshare is a limited company established in the PRC principally engaged in property development, provision of green building services, investment, healthcare products and services business.
Zhongchao Holding is a limited company established in the PRC principally engaged in investment, wire and cable business, sale in power transmission equipment and related raw material, and agent of import and export business.
Zhenghe Investment is a limited company established in the PRC principally engaged in investment and mechanical and electrical products design, research, development.
Far East Holding is a limited company established in the PRC principally engaged in investment, sale in precious metals, raw materials and electrical equipment.
Xinyuan Industrial is a limited company established in the PRC principally engaged in property development, property management, decoration, cultivation sales, investments and trading business in PRC.
LISTING RULES IMPLICATION
As the applicable percentage ratios as set out in the Listing Rules in respect of the capital contribution by Future Land Investment to the JV Investment Company are more than 5% but are less than 25%, the establishment of the JV Investment Company and the Shareholders’ Agreement constitute a discloseable transaction for the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
“Board” the board of Directors;
“Chengxing Group” Jiangyin Chengxing Industrial Group Co., Ltd. * (江陰澄星實業集團 有限公司), a company established in the PRC with limited liability; “Company” Future Land Development Holdings Limited, a company
incorporated in the Cayman Islands with limited liability whose shares are listed on the Stock Exchange;
“Director(s)” director(s) of the Company;
“Far East Holding” Far East Holding Group Co., Ltd.* (遠東控股集團有限公司), a company established in the PRC with limited liability;
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“Future Land Investment” Future Land Development Investment Co., Ltd.* (新城發展投資有限 公司), a wholly-owned subsidiary of the Company;
“GCL Capital” GCL Capital Management Limited* (協鑫資本管理有限公司), a company established in the PRC with limited liability;
“Group” the Company and its subsidiaries;
“Hongdou Group” Hongdou Group Co., Ltd.* (紅 豆 集 團 有 限 公 司), a company established in the PRC with limited liability;
“Jiangsu Shagang” Jiangsu Shagang Group Co., Ltd.*(江 蘇 沙 鋼 集 團 有 限 公 司), a company established in the PRC with limited liability;
“Joint Venture Partners” Jiangsu Shagang, GCL Capital, Hongdou Group, Yangzijiang Shipyard, Chengxing Group, Zhongchao Holding, Nanjing Fullshare, Zhenghe Investment, Far East Holding, and Xinyuan Industrial;
“JV Investment Company” a joint venture company (tentatively to be named Jiangsu Minying Investment Holding Co., Ltd* (江蘇民營投資控股有限公司)) to be established in the PRC pursuant to the Shareholders’ Agreement; “JV Board” the board of directors of the JV;
“JV Shareholders” the shareholders of the JV;
“JV Shareholders’ Meeting” the meeting of the JV Shareholders held pursuant to the articles of association of the JV Investment Company to determine important matters of the JV Investment Company;
“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;
“Nanjing Fullshare” Nanjing Fullshare Dazu Technology Company Limited* (南京豐盛 大族科技股份有限公司), a company established in the PRC with limited liability;
“PRC” The People’s Republic of China;
“RMB” Renminbi, the lawful currency of the PRC;
“Shareholders’ Agreement” the Shareholders’ Agreement entered into among Future Land Investment and the Joint Venture Partners in relation to the formation of the JV;
“Stock Exchange” The Stock Exchange of Hong Kong Limited;
“Yangzijiang Shipyard” Jiangsu Yangzijiang Shipyard Co., Ltd.* (江蘇揚子江船廠有限公 司), a company established in the PRC with limited liability;
“Zhenghe Investment” Suzhou Zhenghe Investment Co., Ltd.* (蘇州正和投資有限公司), a company established in the PRC with limited liability;
“Zhongchao Holding” Jiangsu Zhongchao Holding Co., Ltd.* (江蘇中超控股股份有限公 司), a company established in the PRC with limited liability; and
“%” per cent.
* The English name is a translation of its Chinese name and is included in this announcement for identification purposes only.
By order of the Board
Future Land Development Holdings Limited WANG Zhenhua
Chairman
The PRC, June 29, 2016